Retail inventory method It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail. 1. Conventional Retail Method Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage. In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist. To Calculate: The amount of ending inventory.

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Answer 1

Question

Chapter 9, Problem 9.10P

1.

To determine

Retail inventory method

It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

1.

Conventional Retail Method

Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Calculate: The amount of ending inventory.

2.

To determine

Last-In, First-Out (LIFO)

In Last-in-First-Out method, the costs of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

To Estimate: the amount of ending inventory (LIFO).

3.

To determine

Dollar-Value-LIFO

This method shows all the inventory figures at dollar price rather than units. Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

To Estimate: the ending inventory in 2015 and 2016 using dollar-value LIFO retail method.

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At the beginning of the year, Herbert Ltd. had liabilities totaling$85,000. During the year, assets increased by $65,000, and at the end of the year, assets totaled $240,000. Liabilities decreased by $20,000 during the year. Calculate the amount of equity at the end of the year.

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Answer 2

Question

Chapter 9, Problem 9.10P

1.

To determine

Retail inventory method

It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

1.

Conventional Retail Method

Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Calculate: The amount of ending inventory.

2.

To determine

Last-In, First-Out (LIFO)

In Last-in-First-Out method, the costs of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

To Estimate: the amount of ending inventory (LIFO).

3.

To determine

Dollar-Value-LIFO

This method shows all the inventory figures at dollar price rather than units. Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

To Estimate: the ending inventory in 2015 and 2016 using dollar-value LIFO retail method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 9, Problem 9.10P

1.

To determine

Retail inventory method

It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

1.

Conventional Retail Method

Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Calculate: The amount of ending inventory.

2.

To determine

Last-In, First-Out (LIFO)

In Last-in-First-Out method, the costs of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

To Estimate: the amount of ending inventory (LIFO).

3.

To determine

Dollar-Value-LIFO

This method shows all the inventory figures at dollar price rather than units. Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

To Estimate: the ending inventory in 2015 and 2016 using dollar-value LIFO retail method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 9, Problem 9.10P

1.

To determine

Retail inventory method

It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

1.

Conventional Retail Method

Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Calculate: The amount of ending inventory.

2.

To determine

Last-In, First-Out (LIFO)

In Last-in-First-Out method, the costs of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

To Estimate: the amount of ending inventory (LIFO).

3.

To determine

Dollar-Value-LIFO

This method shows all the inventory figures at dollar price rather than units. Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

To Estimate: the ending inventory in 2015 and 2016 using dollar-value LIFO retail method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 9, Problem 9.10P

1.

To determine

Retail inventory method

It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

1.

Conventional Retail Method

Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Calculate: The amount of ending inventory.

2.

To determine

Last-In, First-Out (LIFO)

In Last-in-First-Out method, the costs of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

To Estimate: the amount of ending inventory (LIFO).

3.

To determine

Dollar-Value-LIFO

This method shows all the inventory figures at dollar price rather than units. Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

To Estimate: the ending inventory in 2015 and 2016 using dollar-value LIFO retail method.

Answer 6

Chapter 9, Problem 9.10P

1.

To determine

Retail inventory method

It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

1.

Conventional Retail Method

Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Calculate: The amount of ending inventory.

Answer 7

Chapter 9, Problem 9.10P

1.

To determine

Retail inventory method

It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

1.

Conventional Retail Method

Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Calculate: The amount of ending inventory.

Answer 8

2.

To determine

Last-In, First-Out (LIFO)

In Last-in-First-Out method, the costs of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

To Estimate: the amount of ending inventory (LIFO).

Answer 9

2.

To determine

Last-In, First-Out (LIFO)

In Last-in-First-Out method, the costs of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

To Estimate: the amount of ending inventory (LIFO).

Answer 10

3.

To determine

Dollar-Value-LIFO

This method shows all the inventory figures at dollar price rather than units. Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

To Estimate: the ending inventory in 2015 and 2016 using dollar-value LIFO retail method.

Answer 11

3.

To determine

Dollar-Value-LIFO

This method shows all the inventory figures at dollar price rather than units. Under this inventory method, the units that are purchased last are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

To Estimate: the ending inventory in 2015 and 2016 using dollar-value LIFO retail method.

Answer 12

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Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 9 - Prob. 9.1Q Ch. 9 - Prob. 9.2Q Ch. 9 - Describe the alternative approaches for recording...Ch. 9 - Explain the gross profit method of estimating...Ch. 9 - The Rider Company uses the gross profit method to...Ch. 9 - Explain the retail inventory method of estimating...Ch. 9 - Both the gross profit method and the retail...Ch. 9 - Define each of the following retail terms: initial...Ch. 9 - Explain how to estimate the average cost of...Ch. 9 - Prob. 9.10Q

Concept explainers

Videos

Last-In, First-Out (LIFO)

In Last-in-First-Out method, the costs of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

To Estimate: the amount of ending inventory (LIFO).

Want to see the full answer?

Chapter 9 Solutions

Concept explainers

Videos

Last-In, First-Out (LIFO) In Last-in-First-Out method, the costs of last purchased items are sold first. The value of the closing stock consists the initial purchased items. To Estimate: the amount of ending inventory (LIFO).

Want to see the full answer?

Chapter 9 Solutions

Last-In, First-Out (LIFO)

In Last-in-First-Out method, the costs of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

To Estimate: the amount of ending inventory (LIFO).